Good Mistakeshttps://amwarrenptx.wordpress.com
I found out that it is very difficult to make good mistakesThu, 14 Dec 2017 00:32:05 +0000enhourly1http://wordpress.com/https://s2.wp.com/i/buttonw-com.pngGood Mistakeshttps://amwarrenptx.wordpress.com
Venezuela’s inflation problem has been a long time cominghttps://amwarrenptx.wordpress.com/2014/01/10/venezuelas-inflation-problem-has-been-a-long-time-coming/
https://amwarrenptx.wordpress.com/2014/01/10/venezuelas-inflation-problem-has-been-a-long-time-coming/#respondFri, 10 Jan 2014 17:28:22 +0000http://amwarrenptx.wordpress.com/?p=94]]>The Maduro government, fully aware of its precarious position as heir to the internally beloved Chavez regime, has attempted to double down on the generous policies that swept Chavez into power more than a decade ago. Chavez’s largesse, however, was the beneficiary of largely well-managed and productive oil fields, which produced a constant and growing revenue stream to finance such programs.

The world has changed since Chavez and his Fifth Republic Movement began their economic reforms in 1999 – rising oil prices encouraged over production for a number of years in Venezuela, but growing social programs meant a larger portion of revenues were channeled away from reinvestment into the fields, extraction technology, or new discovery. As a result, the country’s oil production has declined from 3.2 million barrels per day in 2001 to 2.2 million barrels a day in 2010 – a stark reduction. The decline forced Chavez in his later years to borrow increasing amounts to finance social spending, including from oil-hungry China. Under Maduro, this debt has come due, and now the country must redirect more than half of its oil exports to China for free, as debt repayment – eliminating an even larger portion of revenue and reinvestment, and forcing more borrowing.

Maduro has thus far proven predictably unwilling to stake his government on reining in overspending, and instead has encouraged a policy of misdirection and deliberate mismanagement to distract the domestic population. Understandably, this tenuous despot, like so many before him confronted by economic malaise, has chosen to embrace inflation as a way of financing the very programs which keep him in power. The expansion of the monetary base, as seen by Maduro, happily has the multiple effects of reducing debts denominated in Venezuelan bolivars, offering a new source of cash for social spending, and creating scapegoats among the business community due to price increases so as to encourage the seizing of goods and potentially large-scale nationalizations, thereby injecting yet more funds into his government. It is doubtful that his citizens are quite so sanguine.

Fundamentally, then, the inflation problem is a debt problem – if Maduro had the credibility or backbone to cut domestic entitlement programs, or perhaps if some part of the international community was willing to overlook Venezuela’s churlish attitude towards the organizations or countries that have the capacity to step in and offer the funds to stabilize the country, then what now seems like an impending derailment could instead become a bumpy, and temporary, detour. With no such resolution in sight, it seems likely Maduro’s regime, and the wreckage of a country he will likely leave behind after he is deposed, will continue to hurtle into the abyss.

]]>https://amwarrenptx.wordpress.com/2014/01/10/venezuelas-inflation-problem-has-been-a-long-time-coming/feed/0amwarrenptxEffects of Corruption in Asian Stateshttps://amwarrenptx.wordpress.com/2012/05/04/effects-of-corruption-in-asian-states/
https://amwarrenptx.wordpress.com/2012/05/04/effects-of-corruption-in-asian-states/#respondSat, 05 May 2012 01:41:13 +0000http://amwarrenptx.wordpress.com/?p=89]]>The power of the state to influence operations and success of businesses is accepted in virtually all policy circles, though traditionally this focus centers on regulatory and tax regimes. Less obvious is the hidden intersection of governance and markets which distorts and subverts both. In Asia, the rapid evolution of markets in many countries over the last century has made government interactions with those markets more uncertain: the lack of durable institutions and legal traditions in the area has created a series of more ad hoc relationships. Corruption and rent-seeking behaviors by bureaucrats is somewhat inevitable in this climate.

What, then, is corruption in this context? For China, Gao argues that

The Chinese government uses various tools or policies to speed up economic growth, to boost exportion of goods and services, to adjust the distribution of incomes, to control price of commodities, and so on. All these activities create rents for businesses. As a result, firms offer bribes to government officials in exchange for the creation and allocation of the rents. (Gao 2011)

These distortions, or “rents”, are opportunities for corporations to capture wealth which then accrue to whichever firms bid most effectively for them, typically in the form of bribes or kickbacks. Rather than being a component of cultural or social norms, though, “rent-seeking and corruption are not just the symptoms of pathological organizations and practices. The root causes go much deeper. They are to a large extent fashioned by the policy and regulatory frameworks which govern industrial planning and set development priorities.” (Ngo 2007) In this context, the inevitability of such behaviors seems less damning.
If that is the case, legal strategies and policy changes should prove effective in reducing the scope and effects of rent-seeking behavior. Gao, however, is pessimistic: “legal enforcement in China is interfered with the high-rank officials severely. The reality is, some officials have super power in deciding if a law is to be followed and how much. Therefore, the legal system and legal enforcement are less useful than a person’s political rank and his/her social status in fighting bribery or corruption.” (Gao 2011) This pragmatic truth runs counter to the stated goals of the state, making the question of resolving corruption a difficult one. It becomes something of a tragedy of the commons, where individual bureaucrats are incentivized to take bribes and the state as a whole benefits from a legal and transparent business climate.

As the Chinese government has been constantly encouraging the formation of joint ventures between foreign firms and indigenous Chinese firms in the hope that it will accelerate potential knowledge spillovers from FDI, our study suggests that reducing the prevailing corruption will help the government to attain its purpose. Although the huge consumer base has helped China in inducing MNEs to establish joint ventures so far, an improvement in the country-wide institutional environment would no doubt provide more confidence for MNEs to consider whether to set up more joint ventures in China. (Duanmu 2011)

International corporations are entirely cognizant of the risks of extortion in relocating to or expanding in developing Asian nations and states must make efforts to address those concerns to drive legal growth. Absent such attempts, business looks much less secure.
The benefits to government officials in an individual sense are most obvious, but less clear are the costs to firms forced to participate in such environments. While firms which successfully bid on available rents must factor in the costs of such bribes, the firms which fail are even worse off.

With the allocation of economic resources (e.g., licensing, fiscal subsidies, tax benefits, low-cost land, and waivers of enterprise liabilities) at their discretion, local governments can either grant preferential treatment to businesses or impose extra fees and fines on them. In addition to suffering from the low priority accorded them in government economic policies, non-state-owned companies are often subject to unfavorable tax rules, pay higher prices to obtain resources, and are more likely to be the target of discretionary fees and charges imposed by local governments. The various discretionary charges imposed on companies often constitute a significant proportion of their total operating expenses. (Chen, et al. 2011)

The potential for negative incentives imposed on firms to promote further coercive behavior and subsequent firm compliance is very real. In many of these states, not paying bribes is simply a losing game. There may be few, if any options for viable business operations absent such payments. This is especially true in the case of sectors which interact most directly with governments: “Another method of procurement widely practiced in the region is direct purchasing/contracting, in which there is little or no competition. In the Philippines, this is referred to as ‘negotiated procurement’ and in Vietnam and Indonesia as procurement through ‘direct appointment’. Direct contracting involves earmarking one company for a procurement and then negotiating the price and the terms of the contract. This mode of procurement is the most likely to be associated with corruption.” (Jones 2009) Government contracts with firms are ideal opportunities for graft and embezzlement, and the predictable result is often borne out.

Companies in the powerful Indonesian Builders Association (GAPENSI) with close connections to government leaders often win large public infrastructure contracts (World Bank [WB], 2003: 32, 33). Up until 2004 in Malaysia, a small network of contractors known as Project Management Consultants, with crony links with Malaysian senior officials and government leaders, won a high number of profitable government contracts for civil engineering consultancies without a competitive tender (Siraj and Sunita, 2006: 201). (Jones 2009)

Without clear public oversight mechanisms, such methods of government profiteering are unchecked, and enrich corporations while impoverishing the societies which should rightly benefit from such contracts.
The pervasiveness of such processes in the region makes it seem somewhat inevitable. Why should this be true? The history of post-Cold War development in Eurasia is one of extreme and rapid market liberalization, organized under the framework commonly titled the Washington Consensus. This flash integration into global markets created wealth overnight, but also opportunities and weak institutions: “It is seen that economic shock therapy has lead to corruption in the region along with the undeveloped economies in Central Asia. Countries in the region transformed their central planning economic system to a free market system in a very short period under the leadership of Washington-based Institutions.” (Sözen, Sari and Çelik 2011). Moreover, Huang and Snell (2003) argue that, “corruption may be triggered by the discontent of self-perceived victims of material inequity (Crosby, 1982; Crosby and Gonzalez-Intal, 1984; Martin, 1984, p. 97). China is a high power distance society, yet salaries of government cadres and SOE leaders are much lower than those of comparable private entrepreneurs, and less than four times those of the lowest level subordinates, even in Southern provinces (He, 1998; Li, 1996).” If the disparities between existent government “firms” operating under a nominal command economy and newly introduced international firms are too obvious, participants in the former will study ways to bridge the gap. This has proven to be especially true in China, as the ineffectiveness of many state owned enterprises in the face of international competition has made the government-backed firms less operationally sound.

In particular, government control may lead to bloated management structure and excessive managerial expenses. With China’s deepening economic reform including the development of input market and the protection of private properties, such costs of government control are expected to outweigh the benefits of government control, which may then explain the decline of collectively-owned enterprises in more recent years (Che, 2003). (Lu, Tao and Yang 2010).

The combination of external pressures and internal discontent has forced a dramatic rewriting of how economic planning is done in many Asian nations, accelerating the process of economic integration, even in states which had robust strategies to combat such outcomes.
This has created something of a paradox in Asian development: the very systems and institutions which are in the West antithetical to corrupt behaviors subtly incentivize them throughout Asia. While there are compelling arguments for long-term immersion in such frameworks reducing the scale and costs of coercive behaviors, and there are obvious success stories in the region like Singapore, the short and medium term looks less than promising on this front. Even the best efforts are undermined by adverse incentives, and firms continue to play a self-destructive game which also saps billions annually from state coffers. The feasibility of development is constrained in such a climate, and likely will be for the foreseeable future.

It noted that Asia can withstand a renewed financial crisis and weakened export demand from developed markets, but long-term prosperity hinges on relying more on domestic and regional markets as well as expanding ties with Latin America and Africa.

Moreover, the report said that currently, the national focus is on containing crisis risks from potential financial contagion and weaker trade. Regionally, there is need for a strong, effective and adequately resourced financial safety net to complement national and global financial arrangements.

It added that this year could prove crucial since financial tensions in Europe could raise more. And there remains concern over the fledging economic recovery in the United States.

The first point is a valid one: a country cannot remain primarily export-directed in low-end goods forever. The rise of a consumer class in many Asian nations is the single most significant demographic and economic trend of the next half century, and providing an expanded range of products for these individuals will do more to create sustainable growth for the relevant nations.

The second one is more difficult. The ability to limit exposure to international financial trends is extremely limited for even the most functional set of institutions, and even moreso when the status quo focus is on exports. Even if the first goal of domestic diversification is accomplished, however, credit markets are so readily interlinked that disentanglement is functionally impossible. So what’s the solution? TARP-style ex post facto policies? Basel III type leveraging limits or capital requirements for financial entities? More rigorous anticipatory regulating bodies to install firewalls to prevent contagion effects? While any of those could help, the plausibility of many of these governments having the institutional capacity or resources to execute them is dubious. Like it or not, Asia goes as the rest of the world does.

Foreign investors have been cutting exposure to rupiah bonds and stocks for weeks, suspending a long spell of bullishness based on Indonesia’s high yields, strong growth and its swift ascension into the investment grade club.

Fund managers have been distancing themselves from the rupiah market too, moving to neutral or even underweight positioning.

So when the same set of investors lapped up a $2.5-billion global dollar bond issued by Indonesia late in April, it was clear that their doubts and unease lay not with the fundamental attractiveness of Southeast Asia’s largest economy, but rather with assets denominated in the local currency, the rupiah.

“This year won’t be the year for Indonesia,” said Arnout van Rijn, chief Asia-Pacific investment officer for Robeco.

Foreigners hold about a third of local bonds, which exposes the $84-billion market to a brutal sell-off should the global risk environment change. And the burden of servicing foreign creditors is burning a hole in Indonesia’s external account, which is already hurting from slowing exports.

Monetary policy must be extremely hard to manage in a relatively small nation faced by currency speculation and other external pressures. Indonesia is at something of an intersection point for such concerns, as even in an otherwise positive business climate, currency pressures make international investors uneasy.

It’s easy in the United States to wave a hand and ascribe currency fluctuations as meeting whatever inflation target we’re currently identifying, or the largely tangential movements of other nations money. But smaller nations have only limited foreign reserves, making government intervention to stabilize their currency less practical.

This problem often makes development operate in fits and starts, if not even more abortively. Indonesia is in the unfortunate position of doing most things right, and still losing.

Myanmar, the so-called last frontier for business opportunities in Asia, will be establishing a stock market by 2015 with the help of Japan’s Daiwa Securities Group Inc. and Tokyo Stock Exchange Group Inc.

Many Japanese and foreign investors believe that the envisaged stock market will open up numerous business opportunities. At the same time, however, some experts have pointed out that after five decades of the isolation from the global community, Myanmar’s transformation from a pariah state to a modern economy will not be quick.

The ability of markets to help transition states to part of the international liberal order is a foundational component of the Washington Consensus and much of the US’ foreign policy. Oddly, however, our reluctance to directly engage with pariah regimes means the export of institutions which would help such a transition rarely occurs.

Fortunately, less politically constrained states like Japan can act as jumpstarters for this sort of thing. In the case of Myanmar, the formation of a functioning stock market domestically will help local firms secure access to credit in international markets, ensuring growth and productivity increases are promoted in the country.

The United States, European Union, South Korea and Japan have submitted a list of about 40 North Korean companies to the U.N. Security Council’s sanctions committee for possible blacklisting due to Pyongyang’s recent rocket launch, envoys said on Tuesday.

The committee, which includes all 15 Security Council members, received an initial response from China that it would only consent to adding two entities to the U.N. list of banned North Korean firms, which the United States and its allies see as too few, envoys told Reuters on the condition of anonymity.

Wait, wait: there are North Korean firms? Perhaps my understanding of internal functions there is very poor, but I was under the distinct impression that the DPRK was a fairly absolute command economy. The existence of firms in that context is perplexing.

The most likely model, I imagine, is probably the SOE’s seen pervasively throughout China: nominally run autonomously, but with initial fiscal backing and significant marketing/production targets established by relevant government bureaus. In the case of North Korea, they might be especially helpful as international intermediaries for trade, given the climate of trade restrictions which surround the Kim regime.

Alone with his wife and children, Chen Guangcheng periodically switched on a cell phone Thursday to tell friends and foreign media he felt scared and wanted to go abroad, and that he had not seen U.S. officials in over a day.He even called in to a congressional hearing in Washington, telling lawmakers he wanted to meet with U.S. Secretary of State Hillary Rodham Clinton, who is in Beijing this week. “I hope I can get more help from her,” Chen said.Chens high-profile effort to keep his case in the public eye increased pressure on Washington and embarrassed Beijing as it hosted Clinton and other U.S. officials for annual talks on global political and economic hotspots.

If Chen’s story is even partially accurate, the narrative of the US human rights regime should make this an open and shut case. Unfortunately, realpolitik makes this a lot more complicated.

Obviously State cannot be especially eager about the prospects of granting asylum or even a meeting to Chen, especially during the middle of a high-profile visit from Secretary Clinton.

The most likely outcome is either a convenient concession by Chen, or a backchannel-directed pressure by the US to allow Chen some modicum of freedom. In either case, the public stalling does us no favors.

]]>https://amwarrenptx.wordpress.com/2012/05/03/principles-are-expensive/feed/0amwarrenptxModeling might be real: Taiwan and the Falkland Islandshttps://amwarrenptx.wordpress.com/2012/04/06/modeling-might-be-real-taiwan-and-the-falkland-islands/
https://amwarrenptx.wordpress.com/2012/04/06/modeling-might-be-real-taiwan-and-the-falkland-islands/#respondFri, 06 Apr 2012 05:08:19 +0000http://amwarrenptx.wordpress.com/?p=61]]>A few weeks ago I was in class and Dr. Sterken asked me a question I don’t remember, which I had no answer for because I hadn’t been following the discussion at all. Obviously, I’m a great student. I had a pretty good reason, though: I was extremely distracted by this paper.

I may be overselling it some, but this is arguably the coolest academic/policy publication I’ve read. That includes a paper on cereal pricing, and I love cereal.

To make a long story short, Goldstein argues that China visualizes the Falkland Islands conflict between Argentina and Britain as a proxy for the tensions involving itself, Taiwan, and the United States. Going further, the paper provides rather substantial evidence that China actively models a great deal of its military planning regarding Taiwan on Argentinean action in 1982. This is not entirely unexpected, given the relationships between the relevant states and how China thinks of itself in the context of global power projection.

Why am I so enthralled by this? That’s a good question. I came across the paper while doing preliminary research for debate nationals, in what ended up seeming like a wasted day; our governing body selected a different set of potential topics which had nothing to do with either China or the Falklands. But the 30th anniversary of the Falklands war (and the evolving tensions over oil fields in the area) made the usual chafing and rhetorical posturing a little more aggressive between Argentina and the UK during February and March, so the risk of some sort of conflict seemed to be rising. If you paid any attention to this sort of thing, you would have seen a few bizarre headlines, including some of my favorite which proclaimed the rise of “squid wars,” as Argentina encouraged its fishermen to capture Illex squid in their hatching grounds in Argentinian waters prior to their arrival in Falklands territorial waters, so UK-backed fishermen would be cut out. Nevermind that adolescent or young squid are functionally useless; if British economic interests in the area were crippled, concessions might become more likely. Alternately, things would just escalate, and everybody would have a bit of a mess on their hands. That seemed intriguing, so I pocketed the idea for later.

Debate is strange. Much of the activity is oriented around comparing policies, and the best way to do that is to evaluate what good effects something causes, or what bad effects a plan inevitablizes. Logically, these comparisons become something of an arms race between teams: what is the most significant good or bad thing we can link to the proposed action? Wars are a vital part of this calculus, and small wars are typically pretty insufficient. So if some action leads to a second Falklands war which causes several billion dollars in damages and a few thousand casualties, at least within the context of the round nobody would really notice.

So what if, instead, this type of conflict could be leveraged to cause a much larger one elsewhere? Rather obviously, China vs the US is a more substantive showdown. So if a compelling story can be told that China might invade Taiwan if Argentina succeeded in capturing the Falklands via military action, we’re golden. Sound silly so far? Maybe.

But it turns out, not so much. Apparently Britain isn’t especially confident regarding it’s ability to win a second time around, because much of the weaponry it used in 1982 has been decommissioned. Harrier jets have been liquidated, Britain’s carrier fleet has been largely shut down, and it has little forward operating capabilities for such a distant conflict.

So if Argentina wins, why does China notice? Well, to borrow from Goldstein:

First, China lacks modern combat experience, especially in the naval and air dimensions. From observing the First Gulf War and the later Bosnia and Kosovo campaigns, Chinese strategists have become keenly aware of the significance of airpower for modern warfare. The fact that many of China’s security concerns lie on its maritime periphery also fuels keen interest in naval warfare.

Naval conflicts globally, especially between developed nations, are no joke to the Chinese. They are extremely cognizant of the skills differential between their own forces and the United States’. The best way to mitigate that, other than routine war games (which they do anyway) is to study conflicts that arise elsewhere, and especially those which use weapons systems much like ours.

A second reason is the asymmetric nature of the Falklands War. China generally continues to view itself as a weak country challenged by much stronger states, a notion fed by the deep shame of China’s ‘century of humiliation’. The asymmetric warfare tradition is strongly visible in almost all People’s Liberation Army (PLA) actions and initiatives. As one Chinese analysis concludes, ‘for countries of the third world … the Falklands War already offers the most essential solutions’.

Nobody wants to face the US military straight up, even in our current era of budget cuts and overstretch. The PLA knows full well a victory would rely on playing to its strengths, which is precisely what the US is not especially good at anyway, as Iraq and Afghanistan have revealed: asymmetrical conflicts. A victory in Taiwan, should the US intervene, would necessarily involve a similar strategy.

The analogy is twofold: like Taiwan, the Falklands are a group of islands not far off the coast of a major regional power which claims sovereignty over them, and in both cases a major Western power serves as ‘protector/violator’ of the disputed sovereignty. Like the Falklands War, the putative Taiwan conflict would involve major air–sea–amphibious combat, and both pit a strong Western power against a weaker but closer regional power.

So 1982 is relevant, but what about this time around?

Even more significant is the 2007 revelation that the Nanjing Naval Command College had initiated, over the previous several years, organised teaching and research teams to study naval forces, naval strategy, sea defence and blockade operations in the Falklands War with the goal of understanding future naval warfare. Chinese military technical writings also draw on the Falklands experience, and the special importance of the case has been recognized in various PLA doctrinal materials.

Plausible. It’s probably unlikely that an Argentinean victory would be the catalyst for a Chinese invasion, but it would almost certainly increase their confidence, and also expand the range of tactical options visible to them.

So this type of thing is what was running through my mind that day, and for quite some time afterward; it was too good a scenario – and too unique – to not develop it as best as possible in the event it came up. It came up.

The topic for quarterfinals at nationals was “The United Kingdom should cede sovereignty of the Falkland Islands to Argentina.” Obviously, this was a scenario we were going to use, and of course the other team wouldn’t see that coming. A funny thing happened: they didn’t have to. It didn’t end up mattering all that much.

Again, debate is strange, but not that strange: it’s fairly similar to the rest of our lives. You can’t succeed unless you make the right strategic choices and pick your battles. Unfortunately, people have a tendency to become sentimental about things they’ve invested a lot of time in, and sentimentality often blinds you to good decisions. Travis and I chose to go all in on the narrative described above, and while it is largely correct (or at least correct in the context of a debate round, which is primarily a set of marginally compelling fictions), it was also less strategic than our other options. We lost on a 6-1, and the team that beat us went on to win their second, and quite deserved, national championship.

Not to draw too sweeping an analogy, but mistakes get made on the basis of imperfect information and stubbornness all the time. Taiwan, the Falklands, and the unfortunate underdeveloped squid are all possible victims of that, not to mention Travis and I. We should all do a better job avoiding those mistakes.

“Obviously for India, the horn is a category in itself,” Michael Perschke, director at Audi India, told Monday’s Mint newspaper. “You take a European horn and it will be gone in a week or two. With the amount of honking in Mumbai, we do on a daily basis what an average German does on an annual basis.” Perschke said the horns are specially adapted for driving conditions in India, a booming market where Audi is one of many foreign car brands competing for increasingly wealthy customers. “The horn is tested differently – with two continuous weeks only of honking, the setting of the horn is different, with different suppliers,” he said.

I’ve heard this before, of course: driving behavior in India is dramatically different from that in much of the West. It seems that different cultures produce different social equilibria, which is I suppose an intuitive conclusion.

The real takeaway on this for me is the sourcing issue: exporters to Indian markets have to identify entirely different supply chains to replace what to us would be a fairly insignificant part. That is probably just as intuitive, though: a dollar says car salesmen in Seattle spend more time talking about windshield wipers or all-weather tires than those in Arizona do.

]]>https://amwarrenptx.wordpress.com/2012/04/02/places-i-am-unqualified-to-drive-an-extensive-list/feed/0amwarrenptxBad Aid, or why we are probably all focusing on the wrong thinghttps://amwarrenptx.wordpress.com/2012/03/07/bad-aid-or-why-we-are-probably-all-focusing-on-the-wrong-thing/
https://amwarrenptx.wordpress.com/2012/03/07/bad-aid-or-why-we-are-probably-all-focusing-on-the-wrong-thing/#respondThu, 08 Mar 2012 04:24:07 +0000http://amwarrenptx.wordpress.com/?p=42]]>I’ve been pretty happy with some of the pushback I’ve seen on Facebook regarding the Kony 2012 stuff, but the cohort of people I’m friends with skews towards individuals who have a competitive incentive to know what the LRA is, so that helps.

Kony is probably not especially nice. I don’t think that’s sufficient, but there are a lot of uniquely awful things in the world and not all of them are helpful enough to have a face. The strategy of comparing him to Hitler is disingenuous and rather useless hyperbole. He’s hardly the worst, even among contemporaries, and certainly not if we evaluate non-human bad things. Nonetheless, aid organizations have a similar problem as environmentalists: we want to act on trendy or sympathetic issues, so pandas and Kony get the dollars and the headlines, while insects and agricultural assistance get ignored.

All of the articles I’m linking are worth reading in full, but the highlights:

So the goal is to make sure that President Obama doesn’t withdraw the advisors he deployed until Kony is captured or killed. That seems noble enough, except that there has been no mention by the government of withdrawing those forces — at least any I can find. Does anyone else have any evidence about this urgent threat of cancellation? One that justifies such a massive production campaign and surely lucrative donation drive?

Goals are confusing. It’s hard to come up with something simple which can be relayed to an audience readily and still have a meaningful outcome. I get that. But this one is severely misdirected. The end result of the movement is a significant fundraising drive to preserve a policy not challenged in any meaningful way.

The group is in favour of direct military intervention, and their money supports the Ugandan government’s army and various other military forces. Here’s a photo of the founders of Invisible Children posing with weapons and personnel of the Sudan People’s Liberation Army. Both the Ugandan army and Sudan People’s Liberation Army are riddled with accusations of rape and looting, but Invisible Children defends them, arguing that the Ugandan army is “better equipped than that of any of the other affected countries”, although Kony is no longer active in Uganda and hasn’t been since 2006 by their own admission. These books each refer to the rape and sexual assault that are perennial issues with the UPDF, the military group Invisible Children is defending.

Aid probably has to go to somebody, but the characterization of there being a single simple dichotomy is facile. We don’t write checks to saints to undergo some titanic battle against evil; we finance deeply flawed institutions taking tepid and chaotic steps towards uncertain outcomes.

Even worse, there’s a cost to all this:

Simple stories make for very effective advocacy. The problem with simple narratives, arise, however, when they drive simple-headed policy.

Severine Autesserre takes aim at the Enough project and other activists in a thoughtful new paper:

The dominant narratives have oriented international programmes on the ground toward three main goals – regulating trade of minerals, providing care to victims of sexual violence, and helping the state extend its authority – at the expense of all the other necessary measures, such as resolving land conflict, promoting inter-community reconciliation, jump-starting economic development, ensuring that state authorities respect human rights, and fighting corruption.

Even worse, because of these exclusive focuses, the international efforts have exacerbated the problems that they aimed to combat: the attempts to control the exploitation of resources have enabled armed groups to strengthen their control over mines; the disproportionate attention to sexual violence has raised the status of sexual abuse to an effective bargaining tool for combatants; and the state reconstruction programmes have boosted the capacity of an authoritarian regime to oppress its population.

This is the problem with pushing advocacy agendas. If you are really good, and really lucky, you can get the UN or US to do one thing this year. That’s a big opportunity cost. Surely one had better make sure it’s the right thing?

I think the corollary to the IC movement that most readily jumps to mind is the Enough project, an equally dubious but highly promoted organization designed to help distant people with complicated issues, in one case the trade of coltan by rather unpleasant military groups. The goal was to develop policies to remove financing for operations which ended in occupation, ethnic cleansing, and rape.

Unfortunately, even before (poorly conceived) regulations were enacted, these groups did not receive most or even a particularly large amount of their funding from coltan mines. Ahead of coltan was gold extraction and even cow smuggling. Cow smuggling. Think about that for a minute: militias engaging in horrific, criminal acts of violence and sexual abuses derive funding from herding cows. Can you visualize writing your Congressman about cow smuggling in the DRC?

People die or suffer everywhere, for a lot of reasons. The introductory point of the Kony 2012 video is right: we have the capability to change that. But the broader question might be why the focus isn’t on the low-hanging fruit, problems we can resolve quickly or cleanly, or at least without ambiguity. Opportunity cost matters. If you only have a few dollars to give, and a little attention to dedicate, shouldn’t it be towards a problem worth addressing, via a mechanism that can accomplish something towards that end?

With that in mind, you should probably take a look at GiveWell, an organization which reviews and evaluates the effectiveness of a variety of charities. If your charitable donation is a purchase – an attempt to save a human life – shouldn’t you know how much bang for your buck you’re getting? This is a good starting point for that.

At the risk of piling on, your TOMS are probably silly:

The biggest argument by those who support TOMS is that the company is helping the poor and making an effort to close the gap between the haves and the have-nots. Unfortunately, shoe donations and other in-kind giving (or GIK…gifts-in-kind) does more to hurt the economic growth of the targeted areas than it does to help.

Extensive research concerning local shoe production is not readily available, but a close substitute is apparent and ripe for discussion: clothing donations into specific poor areas. One researcher, Garth Frazer, looked into “Used-Clothing Donations and Apparel Production in Africa”, and found that there is a significant connection between donations and production. Frazer concluded that

“Used-clothing imports are found to have a negative impact on apparel production in Africa, explaining roughly 40% of the decline in production and 50% of the decline in employment over the period 1981–2000.”

50% of the decline in employment? That means that thousands upon thousands of jobs were lost due to the “good deeds” donors thought they were doing, inadvertently preventing thousands of poor Africans from earning a living and being able to provide for themselves. According to The Nation, “between 1992 and 2006, 543,000 textile workers lost their jobs” in Nigeria, as over 150 companies have shut down due to being undercut by outside aid.

Having shoes to mitigate the risk of hookworm may or may not be worth the cost of increased poverty, but if you consider the opportunity costs of just giving that $25 to construct latrines (which would probably solve at least as well, and for longer periods) instead at no employment cost, the deal starts to look less promising.

All of this can be read as cynicism, but I prefer to think of it as subversive optimism. We can fix things, but first we have to learn how to fix how we fix things.